Country Governance

Belgium Federal Parliament, Country Governance

Invest in public sector eficiency

The gradual decentralization of the Belgian State since the 1970s has entailed frequent changes to the country’s governance structure, most recently with the Sixth State Reform in 2014. Political competences are now divided - or shared - between the Federal Government and the Regions and Communities. The increasing complexity in the way Belgium is governed is not only difficult to understand for companies wishing to do business here, but it has also created unnecessary administrative burdens and resulted in very high and inefficient public spending.

Manage government spending more efficiently

Belgium has one of the highest rates of government spending in the EU at 52.2% of GDP. While the multiple layers of administration in Belgium add to the costs, other federal states, such as Germany and Switzerland, are nevertheless more efficient. This suggests that there is room for improvement in Belgium. Measures to boost competitiveness can also be seen through the lens of public finances – creating jobs and reducing unemployment decreases social security costs, while increasing economic output and tax revenue.

 

AmCham Belgium recommends

To improve business and investment opportunities

  • Focus on developing and implementing a coherent and efficient government operating model across all government levels
  • Revise the allocation of the government budget to make more room for investing in investments
  • Enhance collaboration between federal and regional governments to reduce complexity and costs for companies
  • Increase public revenues by increasing the employment rate (e.g. through activation, reskilling and healthy living)

Belgium in the ranks

Cut administrative burdens

Part of the administrative burden on business results from Belgium’s regionalized political structure, which is seen as increasingly complex and inefficient by investors. Regionalization, in its current form, and government inefficiency are often hindering business activity and economic growth. In addition to burdensome procedures, the country’s complex governance structure also produces policy inconsistencies. More regionalization should not equate to more complexity.

AmCham Belgium recommends

To improve business and investment opportunities

  • Simplify the processes for obtaining permits
  • Facilitate the overall framework for companies to do business in Belgium
  • Address sector-specific complexities, e.g. energy, healthcare, mobility

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